10:14AM DanF: We weren't the first to this party, but we're going to be the best, just like copy-and-paste. It's really easy to implement it in a way that really drains battery life. Easy to do it in a way that reduces the performance of the foreground app and makes the phone feel sluggish.

10:15AM DanF: We've figured out how to do it and avoid those things -- that's what took us so long. Demo: Launch Mail, looking at a mail message with a URL. Clicks on the URL to go to Safari. Double-press the home button, window raises up and shows all the apps that are running in a "dock"-like area at the bottom of the screen. Tap on an app to switch to it.

10:17AM DanF: When you're playing a game: double-press Home button, game pauses and you can switch to a different app. Switch back to the game ad it picks up where you left off.

10:18AM DanF: If more than four apps are running, you can swipe left to right to find the one you want to switch to.

10:18AM: To explain how we did this while preserving battery life and performance, Scott Forstall.

10:19 PT: Scott Forstall on stage. How did we do it? We looked at the tens of thousands of apps in the app store, and distilled down the services those apps need in the background, and then we implemented them all ourselves, in a way that saves the battery. And we're providing those services as APIs to developers, so developers can add multitasking while the system preserves battery life and performance.

10:20 PT: Seven APIs we're providing. First is background audio. Example: Pandora. No app more popular. Pandora is changing the way people think about radio. Now here's a demo from Pandora founder Tim Westergren.

10:20AM DanF: Apple directly addresses all the people who said, "I just want to be able to listen to Pandora while I'm doing other things." But should also work with MLB and other apps that let you stream audio.

10:22 PT: Westergren: We add 30,000 users a day on the iPhone. So when Scott asked us to come here, we jumped at the chance. Just a few hours to make Pandora fully background aware. With the new OS 4, I can now head over to Safari while Pandora keeps playing. You can even control Pandora from the lock screen - double tap on the home screen brings up the familiar iPod controls, but now they control Pandora!

10:23 PT: 25 percent of Pandora's traffic is on the iPhone. "Just imagine when this thing goes live."

10:24AM DanF: The Pandora folks were eager to point out that this feature will let people buy stuff on iTunes without interrupting their music.

10:25 PT: Now here's a Skype example. You can be on the phone on Skype, and do other stuff. And even when you're not running Skype and locked, you can still receive a phone call. So here's David Ponsford, head of iPhone product development at Skype.

10:26 PT: He's playing Doodle Jump, and when he receives a Skype call, a pop-up notification appears with a custom sound. You can answer via the pop-up notification and it brings up a very phone-like interface, but it's Skype. And there's a red status bar at the top (like the green one currently for live phone calls) indicating you're still in Skype.

10:28 PT: And for those playing at home, that was API number two - voice over IP.

10:28 PT: Next up: location services. GPS apps, for example. With OS 4, you can be getting directions from a GPS app, while listening to music in the iPod app, and it'll still be able to give you directions.

10:28AM DanF: This will be a welcome feature, as it will let you do other things while GPS apps track your location and continue to provide directions (via voice).

10:29 PT: But there's another class of apps- social networking apps like Loopt. For these apps, there's a solution that doesn't require GPS to be on all the time. And for that, we use cell towers. The radio in the phone knows you're moving from one cell tower to another. It's very low power, we're always listening, and when you switch cell towers, we can wake up and indicate that the location has changed.

10:30 PT: But we take privacy very seriously. We've always put up a panel to let you approve the use of location information. We're taking privacy several steps further. We're adding an indicator (an arrow) on the status bar (next to the battery) letting you know if something's tracking your location. Next, fine-grained settings like with notification services, so you can disable or enable location on a per-app basis. And if any app has asked for your location in the last 24 hours, there's an indicator (that arrow again) so you know it's been checking on you.

10:30AM DanF: This looks great -- you'll always be able to choose which apps can get your location and even figure out which of those allowed apps have actually asked for your location recently. Nice.

10:32 PT: Next, push notifications. We've got this now in iPhone OS 3. That's what we heard last year. But now Apple is building a new service, Local Notifications. Just like push notifications, but you don't need a server. It can all be done right on the phone. So let's say you have a TV guide app that wants to let you know your favorite TV show is about to start. It can do that all locally now, no external server needed.

10:33AM DanF: So all those third-party alarm-clock apps can wake you up without having to be running all night...

10:33 PT: Next: Task completion. There are some apps that take a while to finish. So now Flickr can keep uploading in the background even as you leave to go somewhere else.

10:33 PT: Fast App Switching. Allows an application to store all of its state and move into a quiescent state in the background, no CPU at all. When you switch back, it's instantly where you left it. No need to launch, no need to restore the state, everything has been preserved and you're right back where you were.

10:34AM DanF: In all the talk about multitasking, there's been a lot of "I don't need true multitasking; just the capability to do [x]." Apple's actually provided nearly every one of those things.

10:34 PT: Steve's back on the stage. Second tentpole of iPhone OS 3: Folders. As people are downloading more and more apps, they have to keep flicking from page to page, they want a way to organize them and find them. And Folders fit the bill.

10:35AM DanF: When editing your home screen, if you drag an app on top of another app, it automatically creates a folder. The iPhone names the folder based on the app categories.

10:36 PT: Steve keeps dragging games onto the Games folder, and the icon of the folder is a set of small tiles of what apps are in it. When you tap, it expands down and displays what apps are inside. You can drag it anywhere on the home screen, and you can have as many folders as you like. You can even put a folder in the dock.

10:36AM DanF: Love that you can put a folder of apps in the dock.

10:37 PT: Steve: One of the other things I want to show you is the ability to change the wallpaper. (This is very much the same as the iPad.) You can set the home screen, lock screen, or both to a new image, from the Settings app.

10:38AM DanF: Now you can "see" over 2000 apps at a time.

10:38 PT: 2160 apps on one phone. Snap to it, people.

10:39 PT: Tentpole #3 - an enhanced version of Mail. First up: Unified inbox. Multiple e-mail accounts, and all the incoming mail is put into one inbox. And you can now have more than one Exchange account.

10:39AM DanF: Check one off our wishlist, Jason.

10:39 PT: Bazinga!

10:39 PT: Also, fast inbox switching. With just a few taps you can move quickly between different inboxes - Inboxes appear on the accounts list at the top. Also, ability to organize by thread. New indicator with a number and a double-chevron symbol, and when you tap you see all three messages in that conversation.

10:43 PT: Scott Forstall back on stage for tentpole #5. Great features for Enterprise. iPhone has made huge inroads in Enterprise. More than 80% of fortune 100 companies are using iPhones. Even better data protection: We will encrypt all e-mail, incl. attachments, with your pin code. And APIs available so devs can encrypt all their data inside their apps as well.

10:43 PT: Next: Mobile device management. Been a huge request. Enterprise solutions out there for deploying large numbers of phones to companies. We've done work so that those solutions can also deploy iPhones. Wireless app distribution - companies can now wirelessly distribute apps anywhere in the world from their own servers.

10:44AM DanF: Audience applause for the IT improvements. The business media is apparently in the house.

10:44 PT: Support for multiple Exchange accounts on one phone, as Steve said, and for Exchange Server 2010, and SSL VPN support for both Juniper and Cisco. End tentpole five. How many poles does this tent have?

10:45 PT: Here's #6: Game Center. It's a "Developer Preview" in iPhone OS 4. (Not sure what that means. Hmm.) More than 50,000 game & entertainment titles on the App store. Far more than Sony PSP and Nintendo DS. We want to make gaming even better on the iPhone, so we're adding a social gaming network. You can invite friends, do automatic matchmaking, leaderboards, achievements. It's a preview, and will be available for everyone later this year.

10:45AM DanF: Nintendo says the iPhone isn't a legitimate gaming platform, but Apple's chart shows 10x the number of game titles for the iPhone vs. Nintendo.

10:47 PT: A lot of the apps on the device are free, or 99 cents, or $1.99. And we like that. Users like that. But these developers have to find a way to make some money. And we'd like to help them. What some developers are starting to do is put advertising in their apps, and we think most of this mobile advertising really sucks. And we thought we could make some contributions. This is what this is all about. Helping our developers make some money in advertising so they can keep their free apps free.